Thursday, July 12, 2007

More Bad News for Web DJs

Judges clear way for higher Internet radio royalties

By Jim Puzzanghera, Times Staff Writer

WASHINGTON -- A federal appeals court panel has declined to delay a substantial increase in royalties that Internet radio stations owe for playing music, clearing the way for the hike to begin on Sunday.

Webcasters had sought an emergency stay from the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the higher rates would drive many of them out of business. Some small Internet radio stations already have stopped broadcasting to avoid accruing royalty payments because the rate hike is retroactive to Jan. 1, 2006.

The court made its ruling Wednesday and released the decision this morning. The Copyright Royalty Board, an obscure group of federal judges, set the new rates in March, eliminating a provision that allowed small webcasters to pay 10% to 12% of their revenues instead of a set per-song fee for every listener. The current rate of .0762 of a cent each time a song is played will more than double by 2010, and many Internet radio stations will face royalty payments greater than their revenues.